A Director’s View of the CFO Role: William Roper, CEO, Roper Capital Company

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William (Bill) Roper has a 360-degree view of the CFO post. He is president and CEO of Roper Capital Company, former president and CEO of VeriSign Inc. and other high-tech companies, and former CFO of technology and engineering company SAIC (Science Applications International Corporation)—positions that have shaped his views on the CEO-CFO relationship. As a board member of publicly traded companies, he also understands the important role CFOs play in corporate governance. Mr. Roper offers his perspective on how CFOs should work with boards, what he looks for in CFO candidates and discusses why the path to becoming a strategic CFO often starts with line managers.

William Roper

Q: How has the board’s interaction with the CFO changed over the past few years from your perspective?

Bill Roper: Board members have recognized that their job is broader and more comprehensive than in the past, and that being effective may require getting to know the management tier below the CEO, especially the CFO because that position is the direct line to the finance and controls functions. I’ve been in situations where the board heard primarily from the CEO, but I think that is becoming less common. Generally, effective governance practices require that board members understand what’s going on in the company and its markets, and therefore they should seek out different viewpoints. As CEO, I never found it threatening to let the board know when there was a difference of opinion among the management team or that an issue had been debated. Having intellectual flexibility, when the facts support it, is a good quality in a CEO and a board member.

Q: Are there steps new CFOs can take to establish themselves with the board?

Bill Roper: A CFO should have a good working relationship with the head of the audit committee, for sure. The audit committee members must have confidence in the CFO and the finance team, particularly the controller if the CFO is not a former controller. I would expect nine times out of ten that the audit committee chair would be receptive to building a relationship with the chief financial officer. When I was a CFO, I led board member orientation sessions and brought in key players from the finance team and line management organizations to give new board members a high level business overview from an operating standpoint. At the time, I had a big hand in strategy development, M&A and joint ventures, so it was a rich discussion about the business, rather than a talk about controls and procedures. The board members appreciated the depth of the presentation, particularly if they hadn’t come out of the same industry. For new directors especially, issues from acronyms to industry approaches can be unfamiliar and therefore challenging.

Q: Is it typical for a CFO to meet with the head of the audit committee other than when preparing for a board meeting?

Bill Roper: Definitely, and the meeting may be with the committee chair, a few members of the committee or the entire committee. Generally, public company filings, even those that are not formally audited such as quarterly reports, are presented to the board with the implicit endorsement of the audit committee. The committee members do not want to be in the position of endorsing anything without understanding potential financial reporting issues. In addition, as CFO, I would inform the audit committee of any issue that may have emerged between regular meetings, such as winning a big contract, discovering a problem with a major account or finding an issue related to revenue recognition, foreign currency or such. The focus of the conversation should be on how the issue is affecting the company, or how it could affect the company down the road. Even if an issue is not having an impact, but the issue is being discussed among executives or in the press, that’s still worth a call to the audit committee chair to keep him or her informed and provide the CFO’s perspective.

Q: As a board member, what characteristics do you look for in a CFO?

Bill Roper: Assuming the person is qualified to be a CFO, I look for candidates who are broader than the job, who are involved in the strategy-setting process rather than just receiving the strategic output and focusing on how it affects finance. Openness and the ability to be candid about issues, rather than being defensive, are important qualities to me, as well. I also expect a CFO to listen closely to board members’ questions and to think at a more strategic level when responding. Keep in mind that board members don’t live in the weeds, they don’t manage or run the business. For example, if a board member asks a CFO about the company’s accounting reserves methodology, he or she typically doesn’t want the FASB answer; rather, they want to know if the right amount is being reserved—is it too much or too little—and the potential impact on the company. In addition, I look for executives who surround themselves with good people, preferably individuals who are hired to fill in for their weakness. For example, I would expect a CFO without a CPA or accounting background to have a controller who was very strong in that area.

Q: How does a CFO begin to take on the role of strategist?

Bill Roper: I think there are some environments in which the CFO is viewed as the person who only closes the books. While CFOs should ensure that the company has accurate reports and he or she should avoid surprises, they should also be working closely with line managers to understand their division’s business challenges and opportunities. Frankly, CFOs should try to help line managers do their jobs more effectively by contributing to conversations about where to take the company next, how to create value or how to respond to a competitor’s actions. It is important for CFOs to become more than just the person that’s great at managing the balance sheet and keeping cash in the bank. At the same time, CFOs should bring ideas about opportunities to informal meetings with the CEO and line managers.

Q: Was there a moment in your career when it was obvious you made the transition from an operator or steward CFO to a strategic CFO?

Bill Roper: I joined a high-tech company that had a collection of world-class scientists but no clear role for a chief financial officer. So I had to build the CFO’s role, and that’s when I started reaching out to line managers. I got involved in the businesses, first as someone who could help fix things because the mindset was that the finance guy can help the company with challenges. Then my role gravitated toward being able to also help management identify and create opportunities for growth. The company did a number of acquisitions and joint ventures, not the least of which was a foray into Internet infrastructure services and also the purchase of a major telecommunications software services supplier. My participation in those activities helped me become more involved in the core strategic activities of the company. My job became a much richer and broader experience once I was able to break through that barrier of being just a backroom finance guy.

Editor’s note: This article is part of an ongoing series of interviews with CEOs, CFOs and other executives. Mr. Roper’s participation in this article is solely for educational purposes based on his knowledge of the subject, and the views expressed by him are solely his own. This article should not be deemed or construed to be for the purpose of soliciting business for Roper Capital Company, nor does Deloitte advocate or endorse the services or products provided by Roper Capital. Mr. Roper is a member of the Financial Executives Advisory Group, which serves as a sounding board to Deloitte’s U.S. CFO Program.

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